- Cyprus Property News Magazine - http://www.news.cyprus-property-buyers.com -

Combatting construction sector decline

COSTAS Roushias, the President of the Federation of Associations of Building Contractors Cyprus (OSEOK), has painted an alarming picture of the state of the island’s construction sector.

Speaking to delegates at the Federation’s the 18th annual general meeting in Nicosia over the weekend, Mr Roushias reported that the sector has been contracting over the past four years with its value shrinking 39 per cent to just €1.9 billion in 2012 from €3.05 billion in 2008.

Unemployment in the sector has increased significantly with the monthly average of unemployed workers rising from 902 in 2008 to 6,177 in 2012; an increase of 585%.

He pointed out that Cyprus’ economic crisis has had a negative effect on the turnover of construction companies. It has resulted in lower activity, reduced investments in construction, low liquidity and difficulties in securing financing – and in some cases this has led to delays in making payments and freezing payments for projects that have already been completed.

The Federation has submitted a number of proposals to Government and political parties, which are aimed at supporting the sector and creating conditions for its recovery. Temporary measures include abolishing Property Transfer Fees where no VAT is payable, reducing VAT to 5% for all sector-related transactions and reducing Capital Gains Tax.

Other proposals include measures to combat late payments on public works projects, implementing large public sector projects and making an immediate start on creating the necessary energy infrastructure.